Evergrande EVs Not on Approval List, Raising Delivery Doubts
Evergrande EVs Not on Approval List, Raising Production Doubts
(Bloomberg) -- Two models being developed by China Evergrande Group’s electric-vehicle unit weren’t included on an approval list issued by the nation’s Ministry of Industry and Information Technology, putting another question mark over whether the company will be able to mass produce a car and begin deliveries as promised.
China Evergrande New Energy Vehicle Group Ltd., which hasn’t mass produced any cars for sale to consumers despite pledging to take on Elon Musk in early 2019, applied for approval for two models of its Hengchi brand last month. Both models are pure electric SUVs powered by energy-storage units made by Contemporary Amperex Technology Co. Ltd.
The MIIT list was published for feedback until Nov. 16 and released on the agency’s website on Wednesday but Evergrande NEV’s models were missing.
Neither the ministry nor the automaker disclosed details about the final decision, according to the list, while calls to Evergrande NEV company representatives went unanswered.
Although Evergrande NEV has made several attempts to raise money over the past few weeks to fund mass production of its electric cars, it warned as recently as September that it faces a serious funds shortage, echoing some of the financial troubles faced by its parent company.
At its peak one of the most valuable assets in Evergrande founder Hui Ka Yan’s empire, Evergrande NEV said it had suspended paying some operating expenses and flagged that several suppliers had stopped work, stoking concern it wouldn’t be able to start mass production of its long-awaited electric vehicles.
The cars it has made are largely for display and testing purposes. It displayed several models at the Shanghai autoshow in April and released photos and video footage of one batch of cars undergoing a winter test in Inner Mongolia in February.
Evergrande NEV reported cash burn of around $130 million in the first six months of the year and a $742 million loss. Its cashflow difficulties make it increasingly unlikely the carmaker, which once had ambitions to take on Tesla Inc., will actually be able to start mass deliveries in 2022.
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With assistance from Bloomberg